Trust Bust: GReddy Parent Company Goes Bankrupt

Posted September 12, 200816 yr

09-11-2008 11:34 PM

A Japanese credit researching company is reported yesterday that mega Japanese tuning firm and a mainstay of the import scene Trust has filed for bankruptcy at a Tokyo District Court. You may know them by their US brand name, GReddy, makers of all manner of suspension, engine, brake and turbo kits.

Apparently, the company was $60 million in debt, citing declined annual sales of $53 million in February 2008, the culmination of a steady decline since 1998 when sales were at a high of $80 million. Trust was founded in 1977 and has been an active part of the Japanese tuning and racing scene for over three decades.

There are a whole host of reasons why this could have happened. Our analysis: aggressive expansion into foreign markets made the company vulnerable when automotive trends shifted. Many so-called enthusiasts were merely fickle bandwagon jumpers that never made up the core group of die-hards. This, coupled with the recent economic freefall, the disinterest in cars among young Japanese, perhaps even the lack of performance platforms offered by the automakers, and a steady influx of knockoffs into the market, all steadily chipped away at the company’s profits.

It’s this last one that really gets us because it’s the only one within our control. The lesson here is that if you love something, support it. The reason GReddy (and other similar companies) have higher prices is because they actually do the R&D required to make these kinds of products. Less reputable companies will then swoop in and copy the design, allowing them to sell for much less because they’re not shelling out for the R&D. Even if the quality is just as good, the public’s desire to save a few bucks leads to such a sorry state of affairs. Those companies will simply move on to knocking off something else once all the Greddys are gone, but who will be left to develop the new products? /End rant.

The possibility exists that the company will be able to restructure and find new investors. We hope this is the case.

[JDM Insider via Autoblog, Images: Trust]

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